CHAPTER 2 LITERATURE SURVEY 1. INTRODUCTION
5. SERVICE QUALITY
5.1. Determinants of Service Quality
5.1.10. Understandinglknowing the customer
Understanding/knowing the customer involves making the effort to understand the customer's needs. Itinvolves:
• learning the customer's specific requirements.
• providing individualised attention.
• recognising the regular customer.
Parasuraman, Zeithaml and Berry (1988) as cited in Baron and Harris (1995), points out that the ten determinants are not necessarily independent of each other, that is, there could be some overlap between the categories. These determinants are also appropriate for assessing quality across a broad variety of services.
After further research into the measurement of service quality, Parasuraman et of (1988) (as cited in Baron and Harris 1995), advocated that the ten determinants could be collapsed into five dimensions of quality. They are:
• Tangibles: including the physical components of the service, for example seating, lighting, etc.
• Reliability:dependability of service provider and accuracy of performance.
• Responsiveness:promptness and helpfulness.
• Assurance: knowledge and courtesy of employees and their ability to inspire trust and confidence.
• Empathy:caring, individualised attention the firm gives its customers.
The dimensions of tangibles, reliability and responsiveness remain unchanged.
'Assurance' encompasses competence, courtesy, credibility and security and 'empathy' includes access, communication and understanding the customer.
Virtually all-subsequent research, by Parasuraman, Zeithaml and Berry and others, involves use of the five dimensions of quality, rather than the original ten determinants.
5.2. Underlying Principles of Service Quality
When discussing the concept of service quality, three underlying principles should be keptinmind.
~ Service Quality is more difficult for the consumer to evaluate than quality of tangible goods
When purchasing goods, the consumer employs many tangible cues to judge quality: style, hardness, colour, label, and feel, package and fit. When purchasing services, fewer tangible cues exist. In most cases, tangible evidence is limited to the service provider's physical facilities, equipment, and personnel. In the absence of tangible evidence on which to evaluate quality, consumers must depend on other cues. Researchers have not investigated the nature of these other cues, although some authors have suggested that price becomes a pivotal quality indicator in situations where other information is not available. (McConnell, 1968, Olander, 1970, Zeithaml, 1981)
~ Service quality perceptions result from a comparison of consumer expectations with actual service performance
Researchers and managers of service firms concur that service quality involves a comparison of expectations with performance. Gronroos (1982) developed a model in which he contends that consumers compare the service they expect with perceptions of the service they receive in evaluating service quality.
Smith and Houston (1982) claimed that satisfaction with services is related to confirmation or disconfirmation of expectations. They based their research on the disconfirmation paradigm, which maintains that satisfaction is related to the size and direction of the disconfirmation experience where disconfirmation is related to the person's initial expectations (Churchill and Suprenaut, 1982 as cited in Parasuraman, Zeithaml and Berry, 1985).
~ Quality evaluations are not made solely on the outcome of a service; they also involve evaluations of the process of service delivery
Service quality involves more than outcome, it also includes the manner in which the service is delivered.
This notion surfaces in other research on service quality as well. Gronroos (1982) postulated that two types of service quality exist: technical quality, which involves what the customer is actually receiving from the service, and functional quality, which involves the manner in which the service is delivered.
Lehtinen and Lehtinen's (1982) basic premise is that service quality is produced in the interaction between a customer and elements in the service organisation. The three quality dimension, such as physical quality, includes the physical aspects of the service (for example equipment or building); corporate quality which involves the company's image or profile, and interactive quality is derived from the interaction between contact personnel and customers as well as between some customers and other customers.
5.3. A Model of ServiceQuality
Parasuramanet al(1985) initiated a research stream that many consider to be the most comprehensive investigation into service quality. Service quality as discussed earlier, is generally used to measure customers' perceptions of services rendered (Zeithaml et al., 1990 as cited in Frost and Kumar, 2000). Customers are ideal for appraising how well employees have provided quality service because they are in a better position to observe employee performance than employees' supervisors.
5.3.1. The SERVQUAL Model
Parasuraman et af (1985) developed a 22-item instrument named SERVQUALbased on the Gap Model, for measuring service quality.
FIGURE 2 : A conceptual model of service quality Consumer
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~ro---r----"I GAPS
I I I I Marketer
GAPl
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Source: Parasuraman, A., Zeithaml, V.A. and Berry,L.L.(Fall 1985). A conceptual Model of Service Quality and its implications for future research. Journal of
The instrument assesses customers' perception of quality by companng their perception of the services received, across various service quality dimensions.
Research conducted by Parasuraman etaf(1985) has shown SERVQUAL to be an effective and stable tool for measuring service quality across service industries.
The service quality model VIews service quality and service quality problems as existing between the consumer and marketer. From the consumer's point of view, service quality is the difference between what he/she expects and what he perceives to be receiving from the service provider. When the perceptions are greater than expectations, then perceived quality is very good, when they are equal; perceived quality is good; but if expectations exceed perceptions, the perceived quality will be less than satisfactory. Itis thus clear that judgements of high and low service quality depend on how customers perceive the actual service performance in the context of what they expect.
Several factors may influence a customer's expectations. Firstly, what customers hear by the way ofword of mouth communications from other customers is an influential factor. Secondly, expectations vary depending on the respondent's individual characteristics and circumstances, suggesting thatpersonal needsof customers might influence their expectations to a certain degree. Thirdly,past experience with using a service could influence expectation levels. Finally, external communications play a key role in shaping customers' expectations.
The SERVQUAL model pinpoints areas of potential shortfalls in service quality - areas where there could be discrepancies, or gaps, between customers' expectations and their perceptions. This model consists of five gaps and Parasuramanet al (1985) identifies these following gaps:
);> Gap 1 is between consumer expectations and management perception of these
expectations.
Management can provide a service they think customers expect when customers do not expect it.
);> Gap 2 is the difference between management's perception of consumer
expectations and the translation of those perceptions into service quality specifications.
Management may understand and know what customers want but fail to translate these expectations into the correct service specifications (Kurtz and Clow, 1998).
);> Gap 3 is the difference between the service quality specifications and the
delivery of those specifications to the customer.
Primary causes of this gap are the variable and inseparable nature of services.
Since, most services are performed by people, the quality of service is highly dependent upon how well the service provider performs his or her job. If service contact personnel provide services as specified, customers are usually satisfied and their expectations are met. If employees do not provide the service as specifiedin the service specifications, customer expectations will not be met and customers will be dissatisfied (Kurtz and Clow, 1998).
~ Gap 4 is the difference between the service delivered to customers and the external communications about the service.
Promises are made to consumers by a firm's advertising, sales promotions, and sales staff. These promises may be explicitly stated or they may be implied. If the firm does not provide the service that is promised, there is a gap between what customers expected and the service received(Kurtz and Clow, 1988).
~ Gap 5 is the difference between customers' perceptions of an actual service experience and the customers' expectations of an ideal service.
Gap 5 denotes the service-quality shortfall as perceived by customers while gaps 1 through 4, the shortfalls within the service providers' organisation.
Furthermore gaps 1 and 2 are management orientated while gaps 3 and 4 deal specifically with service
5.3.2. Critiques on SERVQUAL and Alternate Models
After SERVQUAL was proposed by Parasuraman et aI. (1988), several critiques were levied against it.
~ Cronin and Taylor's Servperf
Based on a literature review by Lee, Lee and Y00 (2000), it was found that SERVQUAL confounds satisfaction and attitude. Cronin and Taylor (1992) stated that service quality can be conceptualised as "similar to an attitude", and can be operationalised by the "adequacy-importance" model.
In particular, they maintained that "performance" instead of "performance- expectation" determines service quality and that developed an alternative measurement tool, Servperf, which concerns only performance. Research showed that in their empirical study, SERVQUAL appeared to have a good fit .in only two of the four industries examined, whereas Servperf had an excellent
fit in all four industries.
In response to the Cronin and Taylor's (1992) critique, Parasuraman et al (1994) defended their position by insisting that past research provides strong support conceptually and empirically for service delivery as the discrepancy between expectations and perceptions (e.g. Bolton and Drew, 1991 a, 1991 b, Zeithaml et ai, 1991). Itwas pointed out that Cronin and Taylor did not allow for possible interrelations among the five latent constructs. They argued, therefore, that it might have been a possible reason for the low fit of Cronin and Taylor's SERVQUAL data. For the Parasuraman et al argument that conceptually no problem exists in SERVQUAL, Cronin and Taylor (1994) emphasised that many other researchers pointed out the problems of SERVQUAL and they also argued that their actual analysis did correctly account for the interrelations among the five constructs.
~ Brownet
at
non-difference score measureBrown et
at
(1993) argued that calculation of a difference score in the SERVQUAL measure could lead to several psychometric problems; therefore, a non-difference score measure would be more desirable.In line with their arguments, their empirical investigation indicated that:
• the reliability of SERVQUAL has below that of non-difference score measure;
• SERVQUAL could not achieve discriminate validity but a non-difference score displayed better discrimination validity;
• .Variance restriction effects were exhibited in using SERVQUAL; and
• A non-difference score measure outperformed SERVQUAL on other psychometric considerations while requiring subjects to respond to only half as many items.
Parasuraman et at (1993) responded to Brown et at (1993) critiques of SERQUAL's difference score conceptualisation. They argued that the superiority of the non-difference score conceptualisation were debatable. Their arguments can be summarised as follows:
~ Reliability - their own findings from multiple studies demonstrated high reliabilities for the SERVQUAL measures.
~ Discriminate validity - they argued that Brown et al.'s discussion; in two parts were not correct. In addition, the difference score formulation displayed somewhat stronger discriminate validity than did the non-difference score formulation.
~ Variance restriction problem may arise when difference scores are used in multivariate analysis. However, it is not relevant when difference scores are used for diagnostic purposes and the diagnostic application of SERVQUAL
~ Finally, they demonstrated a stronger convergent validity of the SERVQUAL measure using the results of Brown et af (1993) data analysis. In addition, they argued that the SERVQUAL measure has more diagnostics, therefore, more practical implications than has the perceptions only measure.
5.3.3. Problems with SERVQUAL
Although SERVQUAL is an excellent instrument for measunng servIce quality, managers must be aware of some potential problems with the instrument as well as the gap theory methodology on which it is based. An understanding of these problems may prevent service companies from misinterpreting the results and developing inappropriate marketing plans (Mudi and Cottam, 1999).
The SERVQUAL instruments have three potential problems (Mudi and Cottam, 1999) :
• SERVQUAL measures customers' expectations of the ideal firm in a particular service industry. This mayor may not be relevant to the
capabilities of a particular service firm or the set of service firms available to a customer.
• SERVQUAL is generic in nature. Since it is not industry specific, it does not measure variables, which may be industry specific.
• SERVQUAL deals with the gap methodology used for measuring the level of service quality. Measuring consumer expectations after a service has been provided will bias consumers' responses.